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The yields on treasury bills (T-bills) edged down on Sunday as the central bank purchased US$115 million more from three banks on the day to keep the exchange rate stable.
On the day, the government raised Tk 70 billion by issuing three types of T-bills to partially finance its budget deficit.
The cut-off yield, generally known as interest rate, on the 91-Day T-bills fell to 10.52 per cent on the day from 10.53 per cent of the previous level while the yield on 182-day T-bills remained almost unchanged at 10.65 per cent.
The yield on the 364-day T-bills declined to 10.71 per cent from 10.72 per cent earlier, according to the auction results.
"Most banks preferred to invest their excess liquidity in the risk-free securities mainly due to lower credit demand from the private sector ahead of the upcoming national polls," a senior treasury official at a leading private commercial bank (PCB) told The Financial Express (FE) while explaining the latest market situation.
However, the private sector credit growth fell to 6.23 per cent year-on-year in October 2025, down from 6.29 per cent a month earlier, indicating weakening business confidence and tighter lending conditions. The liquidity in the market increased as the Bangladesh Bank purchased $115 million more from three banks on the day.
"Purchases of US dollars by the central bank have helped boost liquidity inflows into the market, contributing to the decline in yields on government securities," the treasury official explained.
The private banker also predicted the existing trend of yields on the government securities might continue in the coming weeks.
The BB purchased the additional $115 million from three banks through an interbank spot market auction to help stabilise the exchange rate of the American currency against the Bangladesh Taka.
The amount was bought under the Multiple Price Auction method and the cut-off rate was Tk 122.30 per dollar, according to the central bank officials.
The BB has so far bought $3.05 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement, the central bank's latest data showed.
"We're purchasing the US dollars from scheduled banks aiming to keep the exchange rate stable, a move that helps sustain export competitiveness and supports the continued inflow of remittances," a BB senior official told The FE while replying to a query.
Under the latest open market operations, the liquidity position of some banks, including troubled ones, has improved as they sold US dollars to the central bank, the official added.
"Such intervention is also contributing to a gradual strengthening of the country's foreign exchange reserves," the central banker noted.
Meanwhile, Bangladesh's gross forex reserves rose to $32.80 billion on December 24 from $32.72 billion on December 22 as per traditional calculation of the central bank.
As per International Monetary Fund (IMF)'s BMP6 method, the forex reserves rose to $28.11 billion from $28.04 billion during the period, the BB data showed.
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